Optical Joy Stick Sensor Gone Crazy

In the Gmail app, when I use the optical joystick to move my cursor, the cursor continues to move around (in random directions) even though I have lifted my thumb off the joystick.

just started about 24 hours ago. I have tried pulling the battery and just completed a hard reset. Still having same issue. I have determined that its a optical mouse issue, always scrolls to the left and if it can't go left it goes up and down in certain apps. I have just now also noticed I am having issues with pressing the drawer button and phone button. seems to be affecting the touch on the screen as well. reminds me of when one holds down a key on a keyboard and does not allow any thing else to happen until key is unpressed. notice, that if you put it back to sleep and wake up it will respond better. almost as if its a time set issue.